Megaport Ltd

MP1: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$51.50	Qdzvz	Jbyhjcfmgb

Megaport Earnings: Disappointing Guidance Not Explained by Economic Factors

Roy Van Keulen

Aug 22, 2024

We lower our fair value estimate for no-moat Megaport by 17% to AUD 12.50 per share. Guidance for fiscal 2025 is below our expectations for revenue and EBITDA and hints at salesforce efficiency and product/market fit worse than we previously thought. Despite this, Megaport shares screen as undervalued. We believe slower revenue growth is partly driven by cyclical factors rather than purely by competitive pressures. The latter would be more permanent, if true, and would be of greater concern.

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